MEDICINE HAT, AB, July 22 /CNW/ - Reece Energy Exploration Corp.
(TSX-V/RXR) ("Reece" or the "Corporation") is pleased to provide the following
mid-year update of its reserve evaluation dated December 31, 2007 (the
"Sproule Reserves Report"). The updated evaluation was prepared by Sproule
Associates Ltd. ("Sproule") as at June 30, 2008 (the "Mechanical Update") and
should be read in conjunction with the Sproule Reserves Report.
Reece made significant increases to its total reserves through
exploration and drilling projects in its core areas in West Central and South
Eastern Saskatchewan. Additionally, Reece's net present value (10% discount
rate, before tax using forecast prices and costs) increased significantly due
to the increased reserves and updated price forecasts. The values in this
report include very little reserves from Reece's exploratory Bakken play due
to the limited data available as of June 30, 2008.
Reece is pleased to present the following summary of highlights from the
- Total proved plus probable reserves increased 27.1% from 4,256 MBOE
as at December 31, 2007 to 5,411 MBOE.
- Total proved reserves increased 32.0% from 2,425 MBOE to 3,200 MBOE.
- Reece's net present value of proved plus probable reserves at a 10%
discount rate, before taxes using forecast prices increased by 142.7%
from $71.7 million to $174.0 million.
- Net present value per share (diluted) is $5.09. This number excludes
any value for Reece's approximately 50,000 net acres of unproved
land, and also excludes Reece's working capital.
- Reece drilled 15 wells (12 net) during the first half of 2008.
The following information is a summary of certain sections of the
Mechanical Update. Sproule prepared the Mechanical Update to be read in
conjunction with the Sproule Reserves Report and in accordance with National
Instrument 51-101 ("NI 51-101"). The Sproule Reserves Report containing all
information as required under NI 51-101 has been included with the
Corporation's year end financial statements and MD&A and were filed on SEDAR
(www.sedar.com) and on the Corporation's web site (www.reeceenergy.com).
Barrel of Oil Equivalent ("BOE") amounts have been calculated using a
conversion rate of 6 Mcf of natural Gas to 1 barrel of oil.
Oil and Gas Reserves
Through the first half of 2008 Reece was able to increase its total
proved plus probable reserves by 27.1% from 4,256 MBOE to 5,411 MBOE based on
forecast prices and costs. Reece's reserves are made up of 40.7% natural gas,
54.1% light and heavy oil and 5.2% natural gas liquids and solution gas.
Net Present Value and Future Net Revenue
The forecast prices used by Sproule in Reece's 2008 Mechanical Update are
significantly higher than those prices used at the end of 2007. This combined
with Reece's increased reserves has resulted in a 142.7% increase in the net
present value of Reece's proved plus probable reserves.
Reece is a publicly held oil and gas company headquartered in Medicine
Hat, Alberta, Canada that trades on the TSX Venture Exchange under the symbol
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
The June 30, 2008 Mechanical Update to the December 31, 2007 N 51-101
reserves report prepared by Sproule was not prepared for use in filing with
any regulatory body.
BOEs derived by converting gas to oil at a ratio of six thousand cubic
feet of gas to one barrel of oil (6 Mcf: 1 bbl). BOEs may be misleading,
particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1bbl is
based on an energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the wellhead.
Certain statements in this news release including (i) statements that may
contain words such as "anticipate", "could", "expect", "seek", "may" "intend",
"will", "believe", "should", "project", "forecast", "plan" and similar
expressions, including the negatives thereof, (ii) statements that are based
on current expectations and estimates about the markets in which Reece
operates and (iii) statements of belief, intentions and expectations about
developments, results and events that will or may occur in the future,
constitute "forward-looking statements" and are based on certain assumptions
and analysis made by Reece. Forward-looking statements in this news release
include, but are not limited to, statements with respect to future capital
expenditures, including the amount, nature and timing thereof; oil and natural
gas prices and demand; other development trends within the oil and natural gas
industry; business strategy; expansion and growth of Reece's business and
operations and other such matters. Such forward-looking statements are subject
to important risks and uncertainties, which are difficult to predict and that
may affect Reece's operations, including, but are not limited to: the impact
of general economic conditions; industry conditions; government and regulatory
developments; oil and natural gas product supply and demand; competition; and
Reece's ability to attract and retain qualified personnel. Reece's actual
results, performance or achievements could differ materially from those
expressed in, or implied by, these forward-looking statements and,
accordingly, no assurance can be given that any of the events anticipated by
the forward-looking statements will transpire or occur, or if any of them do
transpire or occur, what benefits Reece will derive therefrom. Subject to
applicable law, Reece disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
All forward-looking statements contained in this document are expressly
qualified by this cautionary statement. Further information about the factors
affecting forward-looking statements is available in Reece's current Annual
Report which has been filed with Canadian provincial securities commissions
and is available on www.sedar.com.
For further information:
For further information: Lorne Swalm, President & C.E.O., Reece Energy
Exploration Corp., Phone: (403) 526-9700, firstname.lastname@example.org,